SPOA urges red diesel rethink
2 March 2022
The removal of the tax rebate on red diesel and biodiesel for construction industry users from 1 April is certainly proving to be a hot topic at the moment.
It’s been the subject of several recent blog posts here, and now the Scottish Plant Owners Association (SPOA) is calling on the Government to delay implementation of the legislation in light of the disruption arising out of Russia’s invasion of Ukraine.
Yesterday, the price of Brent crude, the global benchmark, rose above $110 a barrel, the highest level since 2014.
SPOA president Callum Mackintosh said: “The removal of the construction sector’s entitlement to use red diesel and rebated biodiesel is, I believe, the first in a series of major changes that will affect our industry and environment forever.
“Whilst we are doing everything we can to support members to prepare for this major change, I do think that the Government should revise its plan based on the escalating situation in Ukraine.
“Fuel prices have shot up in the last few days to as much as £1.50 plus VAT (£1.80) per litre for white diesel in some parts of the UK. This is another hammer blow to the plant industry. We simply cannot sustain this gross inflation of fuel price and the industry urgently needs a delay on the implementation date of 1 April,” he said.
“The SPOA has, therefore, written to the Chancellor of the Exchequer calling for a delay.”
A letter has also been sent out to HMRC and SPOA is urging members to write to their own MPs about the issue.
The association has issued guidance on its website, written in collaboration with HMRC, advising members on how to prepare for the changes. Detailed information including an analysis of alternative fuels is also included.
Callum continued: “I would urge members, and indeed non-members, to take the time to read it. For example, there is a lot of guidance on measures you can take to help prevent fuel theft, a very big concern for the industry. SPOA is here to help, and we are happy to answer any questions.
“Regardless of a delay to the implementation of the legislation, the removal of red diesel entitlement should act as a driver for SPOA members and the entire industry to operate more efficiently and effectively, to consider alternative fuels, consider our impact on the environment and the future of our industry.
“It might even be the catalyst we need to raise our own pricing. The alternatively fuelled equipment of the very near future will cost more – anything between 15% to 200% - so something needs to change.”
Indeed. With the extra cost of white diesel, rising inflation generally, interest rate increases likely and the higher price of new machinery, equipment hirers and users need to look at their figures very, very carefully.
